Will You Be Able to Find Affordable Obamacare Coverage in 2018?

Do you think it’s hard to find affordable health insurance today? Unfortunately, things may get worse before they get any better, especially if you earn too much to qualify for Obamacare subsidies.

With just a 10% projected annual rate increase for 2018, families of three in 47 of 50 major cities would have no access to coverage that meets Obamacare’s affordability criteria and would likely be exempt from the Obamacare tax penalty.

That’s what eHealth recently found.

According to eHealth’s recent study, the average family of three earning slightly too much to qualify for subsidies in 2018 would need to increase its household income by nearly $29,000 before health insurance became “affordable” based on Obamacare criteria.

The Affordable Care Act (ACA or Obamacare) considers health insurance to be “unaffordable” when annual premiums for the lowest-priced plan in a market cost more than 8.16% of a household’s modified adjusted gross income (or MAGI). When health insurance is unaffordable by this standard, you may qualify for an exemption from Obamacare’s individual mandate to buy health insurance.

Government subsidies are available to people earning up to 400% of the federal poverty level, but middle-income households earning 401% or more of the federal poverty level are not eligible for subsidy assistance.

For its analysis, eHealth reviewed the lowest-price 2017 plan available for families of three comprised of two adults age 35 and one child. The same family model was analyzed using data from Healthcare.gov in 40 cities, data from eHealth.com in 9 cities not utilizing Healthcare.gov, and data from the New York state exchange for New York City.

In 47 of 50 cities surveyed, the lowest-priced plan would be officially unaffordable under Obamacare affordability standards for families earning 401% of the federal poverty level (about $82,000 per year in the contiguous US, making them ineligible for Obamacare subsidies).

Among these, the average three-person household would need to earn an additional $28,939 per year before the lowest-cost plan becomes affordable according to Obamacare rules.

These figures are based on a uniform, conservative 10% increase in health insurance premiums between 2017 and 2018. In fact, some independent projections for 2018 have estimated that premiums may increase 20% or more on average. There will likely be significant variability in the actual rate increase in 2018 for each plan and each market.

Specific findings for surveyed cities are found below. A detailed analysis providing additional context may also be reviewed as an appendix prepared by eHealth which pairs the findings here with demographic data describing each city’s median age, median household size, and median income.

Of the fifty cities surveyed, only Detroit, MI; Albuquerque, NM; and Pittsburgh, PA showed no affordability gap with the projected 2018 rate increases. These cities are described first in the table below, while subsequent cities are given in order from least affordable (that is, with the largest affordability gap) to most affordable (with the smallest affordability gap).

Affordability by Surveyed City for a Family of Three

City/Metro area

2017 annual premium for lowest-cost plan

Projected 2018 premiums with 10% increase over 2017

Subsidy threshold (annual income at which subsidies are no longer available)

Affordability threshold (annual income at which projected premiums become “affordable”)

Affordability gap (additional income needed to make projected premiums “affordable”)

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